A Letter of Credit (L/C) is a written commitment document to guarantee payment by a buyer’s bank (Issuing Bank) to a seller (Beneficiary or Negotiating bank) who will receive payment subject to production and delivery conditions are met as defined in the L/C documents.
The most common L/C Documents are Bill of Lading (B/L, BOL), Commercial Invoice, Certificate of Origin, and Insurance Policy.
Types of Letter of Credit (L/C) are Standby Letter of Credit (L/C), Irrevocable Letter of Credit (L/C), Revocable Letter of Credit (L/C), Unconfirmed, Confirmed and Transferable L/C.
Related Definitions in the Project: The Project Contract; Procurement; Project Management
